Kernel upgrade troubles

I've been using the 2.6.3 kernel that came with Arch 0.6 and i've decided to upgrade. I tried using the kernel sources that come with pacman -S kernel26. But had issues when I ran "make && make modules_install". So i got the latest sources from kernel.org and set them up. I've got everything pretty much working, with a couple issues. First there are these little black dots across the top of the screen. It's hard to describe, so check out a screenshot here.

Next, when i press control+alt+F1 my consoles look really messed up. It looks like a scrambled pic of my desktop.